The attention of financial markets in the week ahead is likely to continue to focus on negotiations to reduce the federal budget deficit, which are scheduled to resume Monday morning. Teams from the White House and Congress generally have been meeting twice a day, but Wall Street has been disappointed so far with the lack of firm results.
Reducing the federal budget deficit is seen as key to restoring health to the economy and stability to the stock market. Word or signs of agreement can be counted on to push prices up; continued deadlock will be have a depressing effect on the market.
"The budget talks are the most important thing right now," said Ira Penziner, an account executive at Dean Witter Reynolds Inc.
Other events of interest for financial markets in the week ahead:
Heads of major central banks begin a two-day, routine monthly meeting today in Basel, Switzerland, in their role as directors of the Bank for International Settlements. Analysts watch any gathering of high-level finance officials with interest these days because of the chance that the sessions will result in new efforts to coordinate currency exchange rates.
On Thursday, the Commerce Department will release figures for the nation's overall deficit in foreign trade for September. A disappointing figure for August, released Oct. 14, was blamed for sharp declines in the stock market that ultimately led to Black Monday five days later, when the Dow Jones industrial averaged fell 508 points.
Some analysts are pessimistic about the figures to come out Thursday. Assuming the worst on trade has often been a safe bet, and figures released already by the Japanese government show that Japan's surplus with the United States rose to $4.86 billion in September from $3.73 billion in August.
"The expectation is that just based on that one country, there's no reason to expect any major improvement" in total U.S. trade figures, said Michael Sherman, chairman of investment policy at Shearson Lehman Bros.
On Friday, the Commerce Department will report on the nation's retail sales for October. Economists on Wall Street are watching to see whether Black Monday's impact on consumer spending will be significant or not. Data so far has suggested there has been only minor effect.